scholarly journals Barriers to enter in foreign markets: evidence from SMEs in emerging market

2017 ◽  
Vol 34 (1) ◽  
pp. 68-86 ◽  
Author(s):  
Mahfuzur Rahman ◽  
Moshfique Uddin ◽  
George Lodorfos
Keyword(s):  
Developing Country ◽  
Market Entry ◽  
Emerging Market ◽  
Foreign Market ◽  
Partial Least Square ◽  
Foreign Market Entry ◽  
Barriers To Entry ◽  
Foreign Markets ◽  
Content Type ◽  
Economic Barriers

Purpose Foreign market entry is considered as a key strategy to grow and survive over longer period of time for small and medium enterprises (SMEs). The decision to enter a foreign market is not a straightforward story. Considering resource limitation, SMEs need to analyse the key barriers to entry in foreign markets very carefully. The purpose of this paper is to identify these barriers for the SMEs in a developing country. Design/methodology/approach This study has used primary data collected through questionnaires from 212 Bangladeshi SMEs. A mixed method data analysis technique is used to analyse the firms both from micro- and macro-levels. Following the running example-based case study approach, this study has developed and validated a partial least square-based structural model to assess the key barriers to entry in foreign markets. Findings This study has identified the key socio-economic barriers faced by the SMEs in a developing country to enter in foreign markets. It has successfully framed the socio-economic barriers to enter in foreign markets for Bangladeshi SMEs as a second-order hierarchical model. Originality/value It is often believed that foreign market entry is more affected by social barriers as explained by the existing theories including the Uppsala model. This study, however, revealed that the international market expansions of SMEs in developing countries are more sensitive to the economic barriers.

scholarly journals Effectuation and foreign market entry of entrepreneurial firms

2015 ◽  
Vol 49 (9/10) ◽  
pp. 1436-1459 ◽  
Author(s):  
Sylvie Chetty ◽  
Arto Ojala ◽  
Tanja Leppäaho
Keyword(s):  
Decision Making ◽  
Market Entry ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Decision Making Process ◽  
Entrepreneurial Firms ◽  
Internationalization Process ◽  
Foreign Markets ◽  
Content Type ◽  
Original Field

Purpose – The purpose of this study is to examine the decision-making process for entrepreneurial firms when entering foreign markets and how and why they entered those markets. Design/methodology/approach – A nascent theory in entrepreneurship called effectuation is combined with internationalization process theory as the conceptual framework to study decision-making under uncertainty. The central concept in both these theories is relationships and how they can be used to gain knowledge and thus reduce uncertainty and in the case of effectuation to co-create opportunities to enter foreign markets. The research design involves a multiple case study of software firms from Finland and New Zealand. Findings – It was found that entrepreneurs differentiate between foreign market selection and foreign market entry during their internationalization process, potentially using different decision-making processes in them. They tend to interweave effectuation and causation logics as substitutes in their decision-making. Uncertainty during foreign market entry is not always a barrier because it can provide opportunities depending on the logic used. In addition, there is evidence that entrepreneurs who have existing relationships in foreign markets tend to use effectuation to select and enter foreign markets. Originality/value – This paper transposes effectuation from its original field of entrepreneurship research to the context of internationalizing entrepreneurial firms. Consequently, it contributes toward understanding the decision-making process for selecting and entering foreign markets.

The rise of emerging Indian multinationals: strategic learning for EMNC foreign market entry and internationalization

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Nitya P. Singh
Keyword(s):  
Market Entry ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Business Strategies ◽  
Internationalization Process ◽  
Strategic Learning ◽  
Case Study Methodology ◽  
Content Type

PurposeThe academic literature on emerging market multinational corporations (EMNCs) has classified several strategic options that EMNCs can adopt as part of their internationalization process. Although this research stream does include examples of Indian companies, it has not adequately identified specific strategic practices followed by them as part of their internationalization process. Therefore, this article aims to identify specific firm competencies, home country advantages and strategic practices that Indian EMNCs adopt to achieve foreign market entry and internationalization.Design/methodology/approachThe article adopts a multiple case study methodology supported by unstructured interviews to answer the research question. Using a combination of in-depth interviews and secondary data related to the case study in question, strategic practices of three Indian companies operating in different industry segments are identified and evaluated.FindingsThe results highlight that as part of their internationalization process, EMNCs from India adopt a combination of strategic practices that include strategic alliances, acquisitions, entry into targeted geographic markets, localized and innovative product offerings and niche market focus. This mix of strategic practices, in combination with high levels of corporate parenting, plays an important role in the ability of Indian EMNCs to internationalize successfully.Originality/valueThis study contributes to the international business field by developing a better understanding of the internationalization process followed by emerging market multinational firms. In addition, as the article adopts a case study approach, specific business strategies adopted by Indian firms as part of their internationalization process are identified. The study, therefore, provides a strategic roadmap for firms from emerging countries on how to internationalize successfully.

Overcoming economic liminality: internationalization of B2B SME’s from a small emerging economy

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Barney G. Pacheco ◽  
Syed Akhter
Keyword(s):  
Emerging Market ◽  
Foreign Market ◽  
Emerging Economy ◽  
Foreign Market Entry ◽  
Valuable Insight ◽  
Content Type ◽  
Qualitative Research Design ◽  
Theoretical Perspectives ◽  
Internationalization Strategies ◽  
The Impact

Purpose Current research on small to medium enterprise (SME) internationalization has generated valuable insight but continues to overlook the activities of business-to-business (B2B) SMEs located in small emerging economies. This study aims to fill this gap by testing the applicability of the ownership, location and internalization (OLI) framework to understand the internationalization strategies of small B2B firms in Trinidad and Tobago, a small emerging Caribbean economy. Design/methodology/approach The study used a qualitative research design, which involved in-depth interviews with senior executives of three firms in the B2B sector who were knowledgeable about their firm’s internationalization process. Thematic analysis was then used to understand the motivations and strategies underpinning the internationalization approach adopted by each firm. Findings Contrary to the stereotype of SMEs in emerging markets as fragile enterprises, there is evidence that firms exploited the development of innovative products and processes to facilitate foreign market entry and expansion. Additionally, firms overcame resource limitations by relying on governmental ties and leveraging networking opportunities. The findings also call attention to the impact of organizational learning and the role of knowledge as a dynamic capability. Originality/value Both the context of the study and the application of the OLI framework contributes to the extant literature by yielding substantive insights into the internationalization strategies of B2B firms in a small emerging economy. The findings further highlight how the OLI framework can be supplemented by other theoretical perspectives to better understand internationalization by emerging market SMEs.

Uberization in Paris – the issue of trust between a digital platform and digital workers

2019 ◽  
Vol 15 (1) ◽  
pp. 20-41 ◽  
Author(s):  
Robert Wentrup ◽  
H. Richard Nakamura ◽  
Patrik Ström
Keyword(s):  
International Business ◽  
Market Entry ◽  
Business Performance ◽  
Qualitative Methodology ◽  
Foreign Market ◽  
General Assumption ◽  
Foreign Market Entry ◽  
Content Type ◽  
Digital Platforms ◽  
Digital Platform

Purpose Using the lens of Uber’s digital workers in Paris, the purpose of this paper is to investigate how the trust-building mechanism is constructed between a digital platform and its digital workers in a foreign market entry. Design/methodology/approach This is a case study based on empirical data from in-depth interviews with 35 Uber drivers. A cross-disciplinary literature framework from mainly international business and internet geography theory and a reflexive qualitative methodology are applied. Findings Results show that the relationship between the digital platform and the digital workers is characterized by mistrust and suffers from decreasing commitment levels soon after market entry. Uber mitigates its mistrust via control and scarce mechanisms. The digital drivers’ “illusionary freedom”, a state in which they feel they can log on and log off at any time, enables the digital platform to gradually lower its commitment. The authors find that the mistrust does not seem to hamper the digital platform’s business performance. Research limitations/implications The paper mainly covers the digital workers’ perspective and the case of Uber’s market entry in Paris. Social implications This paper implies that digitally conveyed control seems to come at the cost of lowered human trust. Given the pace at which digital control systems are permeating society, this could eventually lower the whole societal trust level. Originality/value The authors criticize incumbent international business theory for not being sufficiently able to explain a contemporary digital business logic and the authors challenge the general assumption that successful internationalization is built through trust. The authors contribute with the conceptualization of a new technical market entry mode for digital platforms – “digitally controlled proxies”.

Serendipitous opportunities, entry strategy and knowledge in firms' foreign market entry

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mikael Hilmersson ◽  
Martin Johanson ◽  
Heléne Lundberg ◽  
Stylianos Papaioannou
Keyword(s):  
Market Entry ◽  
Foreign Market ◽  
Ordinary Least Squares ◽  
Experiential Knowledge ◽  
Foreign Market Entry ◽  
Learning Theories ◽  
Content Type ◽  
Entry Strategy ◽  
Regression Tests

PurposeFew researchers and even fewer practitioners would deny that serendipitous events play a central role in the growth process of firms. However, most international marketing models ignore the role of serendipity in the opportunity discovery process. The authors provide a nuanced view on international opportunities by developing the role of serendipitous opportunities in the foreign market entry process. The authors develop a model integrating the notions of serendipity, entrepreneurial logic, experiential knowledge and network knowledge redundancy. From the study’s model, the authors condense three sets of hypotheses on the relationships among experiential knowledge and entry strategy, network knowledge redundancy, entry strategy and serendipity.Design/methodology/approachThe authors confront the study’s hypotheses with data collected on-site at 168 Swedish firms covering 234 opportunities, and to test the hypotheses, the authors ran ordinary least squares (OLS) regression tests in three steps.FindingsThe results of the study’s analysis reveal that experiential knowledge and network knowledge redundancy both lead to a logic based on rigid planning and systematic search, which in turn reduces the likelihood that serendipitous opportunities will be realized in the foreign market entry process.Originality/valueThis is the first study that develops a measure of opportunities that are the outcome of serendipitous events. In addition, the authors integrate network and learning theories and internationalization theory by establishing antecedents to, and outcomes of, the entry strategy.

Does entrepreneurs’ risk perception influence firm’s rapidity in foreign market entry through moderation of entrepreneurial decision-making approach?

2020 ◽  
Vol 30 (2) ◽  
pp. 225-243
Author(s):  
Md. Nur Alam ◽  
Imtiaz Masroor ◽  
Md. Noor Un Nabi
Keyword(s):  
Decision Making ◽  
Risk Perception ◽  
Market Entry ◽  
International Market ◽  
Risk Tolerance ◽  
Partial Least Square ◽  
Least Square ◽  
Partial Least Square Regression ◽  
Foreign Market Entry ◽  
Content Type

Purpose The purpose of this paper is to find out whether risk perception can affect rapidity in international market entry. Also, this paper tries to find out whether the decision-making approach, effectuation, can moderate the pathway between risk tolerance and internationalization speed. Design/methodology/approach A hypothetico-deductive methodology has been used to conduct this study. Using partial least square regression, this study tested and proved two developed hypotheses based on a sample of 101 software and IT-enabled services firms in Bangladesh. The sample was selected using non-probability sampling techniques, and data were collected using a structured questionnaire developed from the extant literature. Findings All of the hypotheses proposed in this study have been accepted. The results show that the effectual approach of decision-making negates the risk perception of the entrepreneur and speeds up the internationalization process of that firm. Research limitations/implications The implications of this study are inherent in the entrepreneurial cognition and decision-making approach (effectuation). This study provides an insight into risk perception and the rapidity of internationalization, which can spur future development in this field. Originality/value Rapidity in internationalization of small- and medium-sized enterprises depends on a significant number of factors, one of which is the decision-making approach. The decision-making approach followed by the firms can have an effect on the speed of internationalization. This paper connects the dots between the rapidity of entry to foreign markets with a cognitive variable, risk perception. This paper developed two hypotheses to measure the relationship between risk perception of the entrepreneurs and the rapidity in international market entry with moderation of the decision-making approach.

scholarly journals Locational Factors and Foreign Market-entry Considerations for Malaysian Contractors

2012 ◽  
Vol 9 (1) ◽  
pp. 27-36 ◽  
Author(s):  
A.R Abdul_Aziz
Keyword(s):  
Market Entry ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Foreign Markets ◽  
Wide Range ◽  
Space Limitation ◽  
Model Approach

Past studies on contractor internationalisation adopt a unimodelapproach. Taking up the call of a few scholars, a study isconducted, this time by integrating several extant models of fi rminternationalisation. Malaysian international contractors are usedto test this approach. Due to space limitation, this paper is focusedonly on locational factors. It begins by justifying the inclusion oflocational factors in a multi-model approach. Then it posits thatlocational disadvantage is a more intellectually appealing conceptthan locational advantages. Empirically, it shows that the surveyedcontractors evaluate a wide range of factors before making thego/no go decision to enter foreign markets. It also shows thatpsychic distance was not their major concern. Finally, the locationaldisadvantages create a market space for international contractorswith the tenacity to overcome them, which the sampled populationpossessed.

scholarly journals Perceptions of justice and organisational commitment in international mergers and acquisitions

2017 ◽  
Vol 34 (5) ◽  
pp. 582-605 ◽  
Author(s):  
Emanuel Gomes ◽  
Kamel Mellahi ◽  
Sunil Sahadev ◽  
Amy Harvey
Keyword(s):  
Mergers And Acquisitions ◽  
Market Entry ◽  
Strong Association ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Organisational Commitment ◽  
Entry Modes ◽  
Content Type ◽  
Cross Border ◽  
And Performance

Purpose Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee’s perceptions and thereby their commitment is scarce. This is more so in mergers and acquisitions (M&As) where employee’s commitment has a significant impact on post-entry performance. The purpose of this paper is to examine the association between perceptions of justice and organisational commitment in cross-border M&As. Design/methodology/approach The authors draw on market entry and M&As’ literature and studies on the link between perception of justice and commitment to develop the hypotheses. The authors test the hypotheses with survey data from a merger of two culturally different partners – British and Japanese. A total of 128 responses were received, out of a sample of 151 non-managerial employees within the firm. Findings The results show a strong association between employees’ perceptions of justice during the merger and commitment to the new organisation. Surprisingly, the results do not support the widely reported interaction effects between different organisational justices and employees’ commitment. Research limitations/implications Obtaining data from a single M&A is a potential limitation of this study. Practical implications The study underscores the importance of post-market entry. The results suggest that particular attention needs to be paid to the way employees of the acquired firm are treated during their interactions with their counterparts. Originality/value The link between market entry and performance is well documented. However, little progress has been made in understanding the antecedents/factors that influence commitment in foreign market entry and in particular cross-border M&As. This study helps close this gap.

CEO characteristics and SME foreign market entry mode choice

2016 ◽  
Vol 33 (2) ◽  
pp. 246-275 ◽  
Author(s):  
Katharina Laufs ◽  
Michael Bembom ◽  
Christian Schwens
Keyword(s):  
Host Country ◽  
Market Entry ◽  
Mode Choice ◽  
Entry Mode ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Content Type ◽  
Entry Mode Choice ◽  
Foreign Market Entry Mode ◽  
Ceo Characteristics

Purpose – Using arguments from the upper echelons perspective this paper aims to examine the impact of CEO characteristics on small and medium-sized enterprises’ (SMEs’) equity foreign market entry mode choice and how these associations are jointly moderated by geographic experience of the firm and host-country political risk. Design/methodology/approach – The empirical analysis draws on data gathered from German SMEs testing triple-interaction effects between CEO’s age, firm tenure and international experience, geographic experience of the firm (organizational level), and host-country political risk (environmental level). Findings – Empirical findings validate that the influence of CEO’s age and firm tenure on SME foreign market entry mode choice varies by managers’ level of managerial discretion (i.e. latitude of action) as determined by the SME’s geographic experience and the level of political risks prevailing in the foreign market. Practical implications – Empirical findings help SME owners and managers to understand how CEO’s age and firm tenure are related with individual’s risk-taking behavior and information-processing demands and how these contingencies vary by the context in which the individual CEO is nested. Originality/value – This study contributes to the growing body of literature focussing on SME foreign market entry mode choice by emphasizing the important role of CEOs in the decision to internationalize. More specific, this study contributes by an examination of the interactive effect of CEO’s age, firm tenure and international experience, geographic experience of the firm and host-country political risk and, therefore, emphasizes the context and boundary conditions under which the association between CEO characteristics and foreign market entry mode choice is more or less pronounced.

Ownership participation of cross-border mergers and acquisitions by emerging market firms

2015 ◽  
Vol 53 (1) ◽  
pp. 221-246 ◽  
Author(s):  
Monica Yang
Keyword(s):  
Mergers And Acquisitions ◽  
Cultural Distance ◽  
Emerging Market ◽  
Foreign Market ◽  
Foreign Market Entry ◽  
Firm Level ◽  
Content Type ◽  
Cross Border ◽  
Emerging Market Firms ◽  
The Relationship

Purpose – The purpose of this paper is to adopt a multi-level approach to investigate what factors shape the content of emerging market firms’ foreign market entry decisions, particularly the ownership participation in cross-border mergers and acquisitions (M&As). In addition, the author would like to know if companies from emerging markets that possess higher (or lower) ownership in cross-border M&As receive higher valuation in the market. Design/methodology/approach – Using panel data of cross-border M&As by emerging market firms from 2000 to 2012, the author tests the hypothesized effects of the independent variables on the level of ownership participation; and uses a standard event study methodology to assess the market reaction of a particular cross-border M&A deal. Findings – The author finds that a country-level factor (institutional distance), an industry-level factor (industry unrelatedness) and a firm-level factor (board concentration) have significant impact on ownership participation in cross-border M&As. The author also finds that investors do give high valuation to those emerging market firms that chose high ownership participation in cross-border M&As. However, the author did not finds the support for the relationship between ownership participation and cultural distance. Neither did the author finds the support for the relationship between ownership participation and board independence. Originality/value – This study enhances the understanding of conditions under which the level of ownership participation in cross-border M&As would increase (decrease) and how the market reacts to high (low) ownership participation of cross-border M&As by emerging market firms.

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